Franklin Resources (BEN) 1 May 232023 Q2 Earnings call transcript

Good morning. Welcome to Franklin Resources earnings conference call for the quarter ended March 31, 2023. Hello, my name is Lara, and I will be your call operator today.

As a reminder, this conference is being recorded and at this time all participants are in a listen only mode. [Operator Instructions]

to Head conference Franklin of like host, to Resources. now Oh, Selene Investor would turn over the your I Relations for

You may begin.

known discuss a could with statements in results described Franklin Reform that These Resources, unknown filings. thank us and and just cause actual XX-K which Securities Securities the are and Risk results other statements. made and to Litigation for facts Inc., number such the uncertainties meaning differ this our or Commission, forward-looking other Form of and historical to the Private forward-looking XX-Q on and Factors regarding are morning, filings materially XXXX. Statements factors in of the from and uncertainties Exchange quarterly more statements Act expressed factors call MD&A any Good implied These conference future of sections of important not risks, detail involve results. or and within in you including recent Franklin's risks, other forward-looking recent by today important joining most the Franklin's

I'd to Now over and Chief the to Executive like Officer. call our Johnson, Jenny turn President

Templeton's for fiscal Thank everyone, Hello, and discuss thank the quarter for us you, today to you Franklin of XXXX. Selene. results second joining

As Adam usual, CFO Spector, our Distribution. I'm and joined by and our Global COO; Matt Nicholls, Head of

in in in our for our performance, banking sector, dislocations and active regional investment investment improve result investment see across product and continued by we the trends, momentum regard, terms And asset business skilled to in results. Despite vehicle across stress performance a of exacerbated opportunities classes. Market by investors. market difficult to positive long-term often this diversification backdrop financial relative continue flow

our income, of asset three positive generated and multi-asset net quarter, flows. fixed alternatives, classes: This four

ETFs flows geographies positive in the our Pacific quarter. Flow improved platform. trends our continued indexing Canvas, with in reporting long-term across We also net all custom solution progress Asia and saw region

all affirms volatility no more investments and we heightened diversify are to where of the cycle. and made period to business prolonged the an goals market our help long-term we've clients, the offer importance this economic financial matter Furthermore, in our effort of achieve serve them in choice better

specific improved prior flows, $X.X outflows first with of the from compared to billion prior numbers, the to outflows billion quarter quarter. net long-term As $XX.X to in the starting net

generated continue Importantly, benefit as we flows. Fixed strategies income all continued non-correlated mentioned, fixed investment from of generated on of with calls, alternatives billion. income, and net said income positive fixed that quarter. And to as range our and multi-asset philosophies $X.X we've trend inflows net previous broad this

net municipal inflows interest net by Franklin strategies, XXXX in Canvas. worth quarter achieved and positive. Client increased were each quarter. which in and Income opportunistic since the Trust net corporate, were International's launched over continued in U.S. XX% $X.X September billion, all flow has business the net global Fiduciary Canvas taxable inflows high driven and Fund, Multi-asset AUM platform

Partners which combined with and by each $X.X were net $X.X partially liquid alternative Clarion Benefit Street outflows billion. by billion, total into strategies. in inflows Lexington were strategies, inflows net market private Alternative of offset a Partners, growth driven Partners had

variant AUM. and $X flagship of vehicle. In active launched quarter, equity Equity many billion our a did multi-asset net flows for Cap sentiment equity we Franklin Income reflecting approximately see ETFs net $X.X and but ETFs, positive continued had in now were of outflows total investors, into ETF billion, net Growth Global Fund a inflows we risk-off $XX strategies. in this Small billion

program from and bank. included a approximately episodic excluded $X.X billion regional Cash long-term the management, which net with is of $X.X the AUM and billion associated in sweep flows of from had outflows redemptions quarter

geographies. all we quarter, continued focused model trends sales to experienced gain traction, this regionally and improving has across Our flow

the already Japan. flows which long-term the were Korea Australia, I net and Pacific in driven Asia mentioned by region, positive

was but one, of a disclosed the reflected income and $X.X funding not billion previously pipeline $XX.X mandate. billion funded, institutional Our institutional fixed

Given with focus money liquidity. in March. and institutional in diversification defensive be motion, particularly a market continue This resulted the more on to environment, uncertain in less investors

Turning now across investment generally and In in of are time encouraging particular, our performance. all to of many investment the to that playing sound this out see it's strategies long-term environment periods. performance thesis largest improved

one, quarter, three, strategy The equity strategies. period due XX%, certain composite to XX-year their basis. benchmarks on XX%, our and XX% AUM of one-year improved five Mutual and XX% This primarily outperformed respective Series and ClearBridge Franklin a

of longer-term improvement income we're fixed strategies. Additionally, performance the seeing Western taxable U.S. Asset's in

On XX%, outperformed mutual three, ClearBridge, peers of fund Equity-related increase on the the five and their Templeton one-year performance leading specifically, outperformed are basis. Group AUM Group in our side, XX-year relative one, XX% the XX%, period, Equity products and Equity in for and XX%, Franklin Global a March.

by In Morningstar. AUM addition, of in half mutual funds or was star X rated X fund

ability build In stress clients engaged further earlier, the years, proactively created outcomes processes investment help and from our business, we have uncertainty with mentioned an best we us range to other and specialist in the to navigate I by them March, gives clients. broad philosophies regional banking each for the financial diversified our investment our past several sector. our of over we As believe managers differentiate and

in including our and timely video credit webinars, asset fixed articles and provided classes, venture particularly Clients to alternative managers panels traditional perspectives updates across numerous investment Institute investment specialist offered Templeton income. interested clients who were comprised Franklin through capital, the The posts. our of

We to and demand client continue in fixed income-oriented income, see dividend-yielding products.

secondary real capabilities continue interest. and of be client recent of credit to as estate market private addition, alternative In a as dislocations, such private equity, result

trillion, on from of quarter, the results, was quarter. average our the from briefly prior primarily an $X.X to increased ending X.X% financial and increase trillion Touching $X.XX to appreciation due prior market X% AUM AUM

prior performance two average fewer X% partially days. driven adjusted effective in XX and billion rate the quarter offset operating While higher with $X.X line quarter by from at adjusted adjusted calendar basis quarter's was of AUM, prior this fee points, by revenues increased fees

income XX.X% quarter. to to in Adjusted quarter, from operating an prior prior operating $XXX.X was adjusted margin XX% XX.X% million, the our compared the increase and increased

We continue total billion. with to of and cash maintain strong $X.X investments balance sheet a

me and to steadily business, by benefit expand further capabilities. up that balance investment flexibility, been diversified relative our improving, continue from performance ability our have flows our Let to sheet wrap we summarizing the and affords including us our

the better to Templeton represent focus on outcomes go our my so who employees finally, Franklin admiration well. globe thanks delivering Our thousands remains clients. And for the around of and

Operator? over questions. Now let's turn to your

Suisse. Katz [Operator first Your from Credit Instructions] Please from ahead. the line of Bill go question comes

color very Jenny, Maybe, I you Thank in the one you. supplement. for much. Okay. appreciate the extra all

was and of the and sort if release break flows here in take in of comments prepared best You structural that between, the mentioned your some to on down sort that press are maybe, the could of growth. from you. opportunities incremental things I positioned also Thank of you see where maybe organic sort that wondering advantage side? where you you're inorganic

Yes.

our flows that we see have strategies think there. Western. of or XX in mean, I to income, higher and six top And we managers organic out think in aren't of continues flows So from much that all space absolutely us, Fixed margin. right? growth positive to rate those anything created fixed positive three the have side, income have the So today, tends outstanding for fee equal, are I and which to be alternatives, continued

-- challenges, had numbers they're six-month while strong. and some So top performance now had their decile Western they're actually, very are

is think Plus. and and Bond and I XX Bond five five one in and in three, X Core is one Core in

launched -- strategies like some SMA leveraging with things think consistently but a some actually Canvas technology there's platform. only we've the not best indexing seeded gaining the is and on the We've trend now secular active there. flows launched We direct we we think, or are Canvas, side, out

the take So efficiency, your campus type you able traditional strategies launch with be mutual you some fund to technology. tax them can and imagine of leveraging

ETFs, we organic waiting of And then say the rate. I'm stick. largest the growth actually The for active. is there, I've hockey a $X we're it's inflows, on I'd strong our hopeful been that billion getting percentage - ETFs the

The came quarter the is pretty I primarily RIA this over us. flows our almost of or XX% smart new from -- channel, were beta which think about XXX a $XXX million passive, for and channel that that's ETFs. but U.S. of

So that space. starting just we're into think to tap we

big we think and would I continued We've that multi-asset then say, quarter, in be opportunities. there's to solutions. some there are wins going coming gained And that current in this actually

going include So strong anything continue infrastructure, that have where we'd to very The capabilities. on big on focus from but I the looking always and think we're areas We're traditional have picture to the side the of that would a organic gives space. distribution. we've kind gap to buy real expensive on you product to they're we product is side expand look, that place the alt only a is, else on think gaps have we and M&A What side. to distribution hard said

Obviously, place for loves everybody honestly, consistent best retirement funds is retirement is place flows. mutual because the And it's the today.

XX% of asset we go been tend a then anything finally, country always flows go So capability. to sort that into, there to distribution have some local mentioned you have local we've of of do And I any that would management buyer to assets. because

particularly we open, fast-growing keep countries. So eyes in our always

it those growth, simply what And mentioned, we've Clarion think it's an our But just growth. as there. organic M&A investment and get things. that with mentioned, what become too done is BSP, clear an concluded organic number done, Lexington, maybe Canvas, category via Jenny frankly to the one reason and impossible, is to takes done And either in make just that's that others too Bill, even we've certain or impossible, we've in why frankly, should But hard there leader to done there's level. obviously we in a just organic all we that's situations, on we've Alcentra, just to I add, priority long the Jenny why

And Matt. as through. actually quarter, you fees performance kind on some you a helpful, what of expenses fair amount just both Last a gave of on and variability and one follow-up. layered for guidance That's maybe

if lines sort how of the the quarter? into performance maybe you. So the and I you see was quarter unpack could this Thank big new expense wondering of then some for you

Yes.

want Matt, that? do to take you

take that, I'll Yes, Jenny.

that line than as relative in benefits and So really G&A being so a IST, last gave hopefully $XX in had It firstly, that's was things. came EFR in higher line. by you we and occupancy much slightly very on guided, that about saw from down key the the were we expenses driven higher comp to million guide we three quarter, also to

these by of better all Fortunately, were performance. driven mostly

a compensation; one, increase of a very just important was about formulaic matters; $XX million are plan, So higher performance and to compensation resets compensation in that seasonal we $XX other of sort approach to $XX million performance was XXX(k) formula. aspect related two, of fee another million was of then which funds have

that guided out. explains by the $XX basically million. increased where difference So we between came That where we versus

fee In of we where guide effective basis we terms to quarter, expect rate points. XX around continue next the

this with So consistent quarter.

XXs, fees, higher remain high on approximately mid-XXXs, be from our expect the continued that placement have just approximately we fees, be be mid-high performance of comp XX flat from Excluding a comp assumption IS&T at in down continue the probably does in quarter include of around $XX last area benefits and will million, to the benefits at higher $XXX to gave and flat G&A, fees. that we we'd perspective, slightly which million, quarter guide performance fee assuming clear, in occupancy expect and to T&E to an and again, a we'd X.XX guide performance

of hard about terms performance performance to get fees, and guide as fees, I very previous question it's In talked on know in quarters. this we've we just

and applicable that performance expect quite funds, strong to our in performance consistent, of going to the keep fees to million. continue we guide but Given be $XX we're earning

just characteristics There we had and in fee we anticipated, we've the triggered for are, quarter, that's redemption performance of fees. hit of quarter, the episodic performance higher Clarion fee performance customers guided but five-year another that activity. and related that on which fees both we out came group In -- that to increased of how than meant for threshold this had with obviously, investment performance this time performance example,

both. Thank you,

Thank you.

you. Thank

comes go of ahead. Michael question from next Stanley. Your the Cyprys from line Morgan Please

that. little out to set the opportunity morning. good do curious back see with broadening Thanks clients? fund to could talk money OnChain circle money how Benji the a for there, beyond the bit about your for Just think think Hi, question. saw fund broadly about time distribute And product? you announcement that hoping stable you wanted you the more about vision this how we you taking might I I than you And view as that? distribution I that over also replacement this a OnChain was app guess, recently. to just

Okay.

So a of things. couple

get of or the we're -- have Bank they interested fund. of gosh, we then a OnChain with consistently platforms money Silicon some of needed of that few as we and Ultimately, storage sector, away we idea SEC year regional -- So as a flows cold our in since move the years money sort that market blockchain it's as -- with banking these to say, OnChain process. fund, agency couple money now system -- the hot the built market worked and transfer started some money platforms, Dow's support we felt blockchain in We wallet actually places, fund. like Valley the happened and a to well from, and everything other doing the started been there to philosophically, we

week that what's we this added cross announcement big called is Our chain.

much who your tend to and the space. -- iOS. to crypto iPhone So talk about Think the your other. know They for applications those Android, about don't each don't don't

have in space. You blockchain the same problem the

And that's a two so we Ethereum. it, to when over layer Polygon added

So a now is our which lot, meant businesses the money built to funds. access market Polygon, that on that have

a it global initially as we're there's And over think other products come absolutely that in lot positioning we although well a office we of in blockchain. as adding will space, product. of So out of back sort see Benji can that efficiencies time,

picture, for platform. a maybe pretty been like talk your But sounds products And a your outlook bit. just multiyear big about for across overall fee on rate follow-up could has just pricing as a bit It you the guidance, overall stable, little stable question.

you couple most If of would you back? the you pricing of in as as held movement as what's do look out forward, versus years, over look couple has look surprised maybe you stable years? most back What over the past the you you next versus where where moved in? And you say pricing anticipate more look the

to it take Adam, do distribution want the you're side? you on seeing that because

Sure.

large bottom where So income, hit think a most and here. asset income. classes, I is we've I Those hopefully the the down ground a traditional point. they've the have think move to pricing But seen fixed especially U.S. in fixed equity,

a less larger think because it moves, We our be see we're as that's assets. opposed mix. shift really fee mandates at around, as the to obviously sizes, also see coming rates when the earn And asset in significant rates our more among a able degradation players, see impacting factor to has mix of which we things. significantly industry, really see that's degrading in and fees. on alternative on generally consolidation our We that more impact to you a And rate the tends when in move

that the know, would longer been our mitigate just any -- to expect, though, traditional asset asset space in lower has hopefully, around have add that space and with the just we as alternative be fees. and Mike, But term, fees this management performance that, and to what larger pressure a higher supplement base that part management with we to to mandates growing of you tends to strategy, winning, asset traditional have characterized fees try is in

certain that So we has well the we do strategy stayed playing for about of on we're But our chance overall we and far in and expect if the the a higher mentioned, where again, particular, far, continue dependent rates strategy the winning business. upside. markets, been adding the the happens to quite that mix mandates what to it's asset markets sense effective we traditional equity expect in as us And even have fee highly that with all it's from as of we relatively out in stable our for side, have, creep path know, equity alternative go the the Adam we next the over just building were continue years you up. on on several around where

hedges rate bit the stays system we've be that, as to lower, little income it fixed around, the fee fee a will the effective lower. keep higher stable fee flat, a is it's the rate example, bit possible. that good rate other will for higher. then If be got if broader and as in that's little the And again, for But likely designed way

-- the and trillion mean $XX.X would income I I in there's space. -- fixed

return. can to actually people a Finally, and allocate get fixed income

one-third your You and could target. in have of pension fixed fund income still X% your hit

that's So honestly, lot in performance, way We've we but we had out. working hope more see a hiccups flows some there. its

a to lot in the we're great equity love offset And and active strong alternatives to see which happen doing. with affect just flows the so a franchise could We both fixed it. bigger have we'd that a income,

very Thank Super. much. you

Thank you.

comes go of line Dan ahead. Your the Please question Jefferies. from Fannon next from

Good Thanks. morning.

So the alternatives just wanted to follow up outlook. on

clarification Clarion. a on Specifically,

think said I that you performance lockup for fees. five-year the

then see we performance looking you about was want which So context and And within also specifically the that to the but so Clarion and year, that how the of not and just and wondering more today BSP piece. a that broadly maybe just in you market, saw just generally outlook. outs about funds redemption, prospectively -- if which I then can't talk a last demand at know triggered ins fundraising and talk clarify that. Lexington, the I

Matt Adam, you add. And and can start. I'll So

you then monetize the actually So fees window, fee. the their normal of clients performance performance five-year Clarion, bulk -- hit of the a when with were when process you

an Clarion liquidity prefer are clients redemptions that fund. from in that the this, required in there just clients. others, Clarion that value the they're they queue as they the required a a weigh has a different like sure so making from have maybe quarter, X% to now of client's the institutional versus They preserving and redeem because that choice bulk internal to queue. gone was is not that And -- opposed to redemption

meet they queue, so exposure to office, industrial the I XX% real important about to is they which remember and It's Clarion annually, very that has think it's have the in And space. biggest the area of estate X% And the pressure NAV. little redemption in which big of been X% been of to has residential.

so their to with the estate you'll be feel sit And comfortable feel start in and there we held that like probably raise that then there'll flip. market, is think performance we more rates interest -- real we in as will probably values up, see one folks the so and come

right? As had far to with their as actually in assets. like all finding extent allocated of the they're LPs, that effect reduction to all they'd a liquid over the there's They've denominator business, a alts And deploy the themselves in alt the space. them,

private been take it's fundraising harder on So I mean credit. the side.

Our they're definitely the best in since because some to that crisis. money, allocation BSP you seeing raising there's But financial would of fully fact it. they've the LPs global just over the seen tell that deals the headwinds an are

to out been we a in point we've are I'd will Lexington of LPs love Lexington, set believe fund to out wealth raise it, the XX% Now case raise that. allowed to the just them billion that above actually, have And $XX They -- that of -- extend fund. come they from the and channel. will

think cap $XXX billion. We at and they partner, large $X will with the launched cap. out at fund we to fund that about should with you be it product million, happy first extended the a We and a said

markets markets because deploy LPs actually So able themselves -- is the starting see overall the as overallocated assets capital. to being down. improved, liquid of more been are the that space you're to equity But them kind have their finding

equity been come to down like so The from they are that's existing normal flows bit, haven't their out that other of a things quite private cash alternatives. able fund happened is thing

spot, just now. put but it's tremendous also right in they opportunity So them it's a recognize tougher just a

to Matt, see say I something. you'd can love

mean fee just question specifically the some to Clarion idea I in in performance Yes. terms to composition, a give you and of your around address second.

XX% So realizations, to out annual. quarterly fee, fees, of XX% about of about related performance about the XX% proceeds

invested term. you obvious, just the one, but threshold this, state whole five at customers the I of There's hundreds of have that obviously, just time. on five-year terms client base different points to point year the know know to -- of that isn't be In

different time. occur year there's five So the all thresholds that

-- So can every five of five to quarter, are those leads year the to which fee of course, there the met. performance of years. net, leads which different another group some than threshold be being And to threshold the

on five Sometimes we this the because you to just be it of different the can time based time different a lines. called larger performance out We have performance year happens portion out. thresholds pay

unit built there. We're I of in Their different really is is Lexington, would online well. CP out zone we the traditionally, market, add is focused up wealth better thing and Reef institutional Jenny opportunity platforms. is finally see but the the been starting now. alternative have The the BSP seeing we're fund much channel that the on coming doing good to really XX spoke well. flows wealth Clarion growth final channel good on is producing in about doing now on results channel. so specialized they

Great. questions. Thanks for answering my

Thank you.

go ahead. Your comes line UBS. Hawken the next Brennan from Please question from of

Good my efforts. about build-out morning. and for the alternatives commentary management distribution hear of to see wealth questions. Thank you Good the taking further

So at curious X the the also, Lexington. contributions and Jenny, to color Fund for about thanks,

Have put continuing against much has getting add benchmarking there on what's work when so competitors You'd to how feedback that you flagged you're seen that process that thinking that how Thanks. gone? success, to a team the effort that lot efforts? you're in the out those sense. the makes have that that And then you is write-up, -- And of about there?

it's team. Adam take that let his I'll since

answer Yes. to be, Well, the going then you is know Jenny. what

where they So I in those we're out we've getting And and indications pretty handily. exceeding be, we there. good really had would think should we're the system, when results all that feeling expectations say is we're the of we're about

really we're So the about good feeling results.

few are the I by a driven things. results think

force. investment great a a brand specialized name a combination strong great and distribution have We of of capability

I that Those can three a things channel have other come in don't together firms way think act. the in wealth

number of as the regionals only not a in We the well. independent wires, but are growth and seeing in

product is into that's and that alternative next we're to approach channels both wealth and really set and U.S., U.S. process outside team effort of take the specialized out tap the sales of here the in build now. the the right Our to outside

Thanks pipeline, there's would that. you for unfunded then I at say look touched flows. income bonds? to Western the look? that And however a this far and bit unfunded before the for as But and on Great. mandates you as little you outlook know when are And the for RFPs, orientation active How an you fixed does the there? are on RFP Thanks. the how balance active

Very bonds. active to yield The the news is across activity opportunistic. really from on credit good for is board core global, seeing RFPs to high-grade to the high credit where we're to mandates global private

class comes asset we're all it in on sectors able but So diversified this is point. to XX really fact, XX. crazy dominated the by income, income. which The categories, is what When really one, good five, is outperforming to that that three, it business, coming I are not that most portion And and the is in in means we XXX It's currently, on by of really income composites, from believe, compete seeing our those solutions significant fixed have well. of pipeline quite at the growth. And we're most nicely. fixed quite fixed of

that color. for Thanks

Thank you.

go Bank America. Your ahead. Siegenthaler of from the Craig Please from next question of comes line

large the leading into and for get on it? more potential both now perspective Fed's any bonds, active work on traditional fixed Good and then morning, rebalancing, cycle. you're wanted end it we're the last and do potential also, well. mix And especially your rate that Sticking like to competitive between we of with perspective offerings rebalancing your income, hiking in you're have topic the nearing in competitive of the you Matt, pass the Jenny doing looks inflow given fixed hope

a short would that We're quality, staying side conservative. last, Look, I institutions say of we're have Fed the staying is for waiting we've on. duration and more in been the probably, see but -- high rate to searches this on pretty starting seen what risk institutional increase

at that one, with two, you the that tells So getting economic like the more feel be starting the of backdrop comfortable they're that would curve. peak we're to they're and

will going side the we my a view opportunity comfortable hiking. those in XXXX, stops give Fed and that probably have once decrease, income raise people versus higher active. through think to sense, Fed people is massive -- will We're Adam, think to And get -- passive in rates. the be this a not try fixed I sit just will is a that on but lock I don't the

Not mix. necessarily I little the a say We is tends to bit that certainly a would more to continued little in we here, huge for have the see change where rates have a do that better that movement. that management active All a in volatility extent in situation curve. across you

so into really active. seeing flows we're And good

be it. in to my time important an in space. be passive But It's that's just a fixed the active view. income This is not great time to

just inflows you on as what net we saw into inflows. APAC. the my then which geographies and are Can products Jenny. you, positive comment And follow-up, Thank driving

Sure.

aligning few really that all early is think there Asia marketing there. themes. were strongest product been we've -- around What really been was terms themes our market that's income our in sales something net. and we region focused done a certain and really winning of in in And for on us I has

well Our oldest wins and doing $XX fund Asia. and in is alternatives. in been in the equity income billion and also at over we've up coming forms, But on big institutional its income had particularly various XXth fixed anniversary fund that's its

classes. been asset So it's the all really of

anyone is of bringing Australia sales look you team as than the for else the example, the Asian we was Templeton that colleagues, one at members Franklin where an other first model better markets responsible our in take I a think knowing of team. really implemented client where the if local this and specialist then generalist

of pronounced the first have we geography positive net there, in the started, we've Australia XX in that row that was flow seen Given months retail. earlier places a results in one and

So Asia has been strong.

If flows there. by XX%. gross far our you dominating U.S. see is about biggest though, at obviously, That's market the

Adam. you, Thank it. Got

Thank you.

comes Alex from of the Goldman ahead. Sachs. Your from go next Blostein question line Please

question. the for Thanks morning. Good everybody. Hi,

to your passive, on just but a ETFs products. gain topic have on year-to-date, the hear share income for stay maybe active second. active fixed fixed So point versus overwhelmed I versus the income

on to all to largely traditional that, of fits you're if side? improvement old referring is into dynamic? largely an maybe have fixed in Because continue you cross-sell to within credit that you a And some your institutional curious starting is in the on appetite. Or So of squeezed, income some active the retail hand, opportunity guys managers. right? how one private what the offering strategies to get Or see are

of to those are sort managers working of both how tackle kind from sides? the separate client So together

So the of that part side, denominator Honestly, best the it mentioned, the deals global the question, I the and they're financial leave effect I'll is past this folks private on LPs. say with Adam, but the credit I'll crisis, that an since of to would you. BSP the active second seeing issue take as

the a at seeing syndicated side while banks of bank's still not can structured and The to They're well, the other those and why you deals of are And are is products say, lend. bank portion look this off deals? But they sheet. that retain wanting has equity. those to are products seeing -- those because just balance

stepping team see of private -- traditionally, kind would syndicated credit. just credit to that less they're coming XX-XX banks And so private about I credit it in. and to private And think you're our in say going was more

of they'll you market X% the headwinds buy get liquid the the return said changes Having could in out one that tell secondary, a bond bit. and is think I high a yield. a in a you you dynamic So get can that,

portfolios the because differentiation a there credit market. side is as much liquid headwind that returns is there existing for the the on the so in private the private between today on And credit as isn't

So for a to headwind little I be while. think a that's going

you're hand, -- competition. less very as more other good get the you're lend manager these your get a origination you're to machine On to guys not in deals, and private seeing have have much to banks going credit going good you long and the be as as as

very why So a bit despite of it Adam? that's headwinds we're bullish today. little on

we really but insight there's demand quite classes. yield, we say and special us also for do seen asset around tough to there's active for the I that, And that's into I versus tremendous that we've insight nicely. amount, it's different don't have would predict, that passive. and have across a High know turn plenty into active.

well. If do strategies get think a global weakening you we our can dollar here,

We and designed are specific better to have strategies liabilities. we are pension help now active. feed have to Those that those funded plans all

typically demand over you months. generate we're look after if this, when at seeing slightly their alpha six go that higher So decile beta they're really of tough active a And like every they single Western of traditional a rough they're And portfolio. that's our had the now performance, given greatest across fall a it, last bit manager.

probably So right this for type environment is best now. them the of

about passive, for the feeling So don't opportunities pretty know good active. about but

maybe And for business. follow-up, on Alt my asking question a the

years. over picture. that last last at over to tell strategically You the the AUM it's AUM, of tried guys couple been have quarters, If out and the couple build look full I of of we doesn't flattish sort know

fee begin the next, management XX you sort of based sight, sort of the it's over that the it, old you break see the whether will call that raised over of or next months undeployed quarters? for fees coming a on of things us today. associated that things been growing is that see have line do how book couple you down what funds with or the have help already And where private on online you maybe guys capital earning So deploying

want to take Matt, do you that.

Thanks, Jenny. sure. Yes,

where bit to come a Alex, we've to So to, think review a from maybe important. and just of back that's take step

to Our it alternative XXXX, to fee screen, by increase let's we XXXX increase management XXXX another expect to by XXXX it, XX%. XX%. From from asset call

the a that of sort mid- the AUM obviously, XXs, Just high sort is But and -- EFR. mid-XXs range generating over creates of AUM significant. of the very XX% is

So we've got very XX% different within fee that earning businesses AUM.

as whole, alternative revenue management business. fee of that assets our That quarter XX% reached our overall a means this from

target more traditional terms stable fee obviously, and assets. expected alternative our down it, a But that's that business call there to a in let's in close bit, to have market little function it's the very is revenue. being of Now the the getting is shrinking market one-third, of we coming management

revenue terms the revenues. billion $X.X dollars were our what in million have $X this getting year. to $X.X you fee few that, a go high know we you hundred contribution performance last from of billion of you of and billion to fees management If year, in fees performance that had to We're

has I outside just area. a it all I to where in we're in of asset if to at is by AUM, alternative conservative think being that business. XX% liquid grow where actually would the you're of it to XX% of higher, organically in between should we've Alex, acquisitions, side rate X% The what or acquired. growth that terms we've the be area was future all referring but that the that think potential we on XX%. see shrinkage -- additional the grown of an organic X% the great X% and of XX% It on And experienced

be there what two, But and the We had say, business led business, traditional year to much EFR fee overall, late just have of this one. that expect to not hedge terms are very the issues number on a management I'd and how the in what's expect, on outflows some is business, generating. earlier strategies the generating against sizable be where fees asset Number performance asset last we couple be that what's and that overall year and and we there. contribution where performance helps mix us of target the fee fairly alternative to to we overall

guys. you, Thank helpful. Very Great.

Alex. Thanks

you. Thank

from Ken comes Your Please JPMorgan. of from next ahead. question go the Worthington line

taking for thanks And morning. the questions. good Hi,

or The equity the equity on this gross funds gross First business. inflows inflows were into quarter. soft

you global that quarter. are What sort small saw versus the working cap. environment, highlighted but areas what are this most saw versus clearly, off last seeing here? you incremental of struggling of today in parts you Where pain quarters? ETFs mentioned quite the You of the quarter business the the you prior risk was some Like well, are delta that where

Yes.

you actually I flows softest look asset dividend, ex they at So first our class, down. were redemptions equities a were that but take thing, our if would note was up quarter-over-quarter, our and

So some behind the news net. bright negative

was the the area significant base. hardest several we where look numbers take a over and of area it's last have the flows you negative with asset large-cap If was large that it's market equity and quarters, the that, the at behind a most hit growth

So we are roughly balanced.

and where cap we AUM smaller growth value, is those areas classes smaller negative the asset versus actually and that with of We international see in a pie, growth, lead have of that have large a slightly hit are area but in truth number funds, more some flows. have of actually growth small slice like helped some the is overall. in hard, that we the positive had which positive The flows cap flows we to where

Are and positioned money that to comes lastly, part in outflow if from March. banks then banking it money then sort as Thank there the in was one-off the by sweep done? broadly mentioned more for money And to Okay. big it and from I program. funds market the more And outflows benefiting And and transition of what the Western program? is stress Franklin how is extent business funds. of quarter is management a sector as out helped banks like Or the guess, in one come you. from future? you cash To of Franklin's this a

in they're bank. otherwise, There just through. But billion that already could has couple of passed be the in of more regional because outflows it potential bulk that a still

markets, space. behemoth now in the a So Western's it's about money positioning and obviously, our

for are it. we So positioned well very

Okay. Thank Great. you.

Thank you.

of from the Please from go next Evercore. Your question Schorr line Glenn comes ahead.

there. Hi,

a you a nature multi-boutique to -- referred multi-asset circle in the back. to Franklin My feeling progress times. want to deliver orientation was because I is So Legg solutions before in franchise just progress -- of guess was a trying few work the I work the of it.

in of then process them and it, at better together. was motioning Franklin the you're think I

private You bunch markets. of add in a

question think of large is and in terms my you're that to see being where on? future? do we you is, mandates the And able at Matt. working something should you're deliver in to So multi-asset expect Thanks

is, and our that's with we at around as a is years. mentioned, it. the one that we're that big Fund I again, think our for being We Franklin opportunity of roots areas growth. good of think Income I pretty flagship And So think XX

we space that focus. big group. And from area an of of came couple been actually, April, have solutions in it's in a the our So multi-asset wins

of Brandywine I So right a together up benefits now, and pull even the today, to the more alone credit, let just that out on [indiscernible] our space. and to But Street it Benefit trying doing team product. there's time. that and And think have get management fixed to other, I starting income mean to just much, whereas with discussions to between that is -- work Partners Partners each [indiscernible] flows was ideas. Legg I a and private talk the didn't strong speak with difference and private liquid greater quarterly much we're credit joining parent in each to Western reaching but probably sims -- I between credit at Benefit Street willing on and think starting other could Adam was don't the consistent to a local CEO managed asset come say consistent flows get we're would there, since there's pipeline sims the the he what were we

not with working to also with they're the who's other. ideas think – with we're solutions I there's But SIMs investment finding various So actually teams, of only out up one that just the the group coming work each is are multi-asset them. coming

significant able through the Absolutely. institutional on channel, thing take pickup And business to this et there. I strong about we're that technology thing and goals wealth is engine. orientation is We're large a asset But that other think the nice our actually the our we're seeing companies, to allocation solutions cetera. solutions we're with platforms, other insurance using side the space pretty nice optimization

So it's from board really the wealth to institutional. solutions across

Thank you, all.

Thank you.

go Your Bank. next comes Brian from line ahead. Deutsche Please of question Bedell from the

two-parter ask a is morning, Good income. retail And in folks. -- if can side. fixed public the Thanks. Great. to I that I just switching maybe

in can as the If taxable you obviously, higher for also the considering, the bond you're rates and well, global of franchise demand you comments how seeing made Franklin the we franchise, earlier much on rates. stability characterize have classic

sound risk we're drop mandates fare that up. more say, it's do sustained, into how of potentially, how about future would on and for if higher good if Western into picking side, the again, more scenario? back would see excited And kind guess, flows that in move year that's to cycle of any later in, be a of the second -- institutional a set. moving plateauing we sort credit or rate the very more you be then part would I And the that you part recession Western the a that's

XX grossing are Well, of our both Franklin, fixed Western. Brandywine as of strategies all mentioned, I top that's six and a and income, mix

that it as So there's returns about excess between and from correlation nice it's prior come frankly, to investment and portfolio calls, Brandywine's Western -- of really at teams. a how very we little we've are in talked diversified

I'll let on Adam where all comment makes I talk thing. active the That about just the kind would flow credit cycle. management difference. is of the

you going approach to do so as flow. make as active to had opposed into to move -- recessionary add we deeper environment want in if all a difference we And kind to it's environment, portfolio the to that you your honestly, fixed an of a recessionary lighter Adam, income. the

which things Western, well business, not our $XX addition seeing where to of has around. is an turned We're billion. the story, we traditional in When growth area global there Franklin systems. we're Munis And the which That's as more strong positive. placement forget on about talk performance is something seeing macro Yes. like our side let's

private think as is share you to allocated bonds. portion I with tailwind Western, for are could fixed-income. the hope significant go that your to as those and of return well. thing, That those actually both meet now we your of then strongest truth the Brandywine well credit assets So the of The all is can assumptions going

side that are the from? just, where redemptions still seeing the there sort are guess coming you fixed income any areas Is pressure? I of on retail And

core redemption core of drivers the be share to and that I side. tend they well the plus, income Look, biggest the based sales would as as say of just two gross the drivers fixed on are

Great. Thanks very much.

you. Thank

Fargo. from a go have Please O'Shea of ahead. coming from the Finian question Wells line We last

and that if in is And morning. on Alcentra. progress platform? more do receptivity talk Any Street, Can you. on on then Benefit you on the can Hi, provide LPs for the early everyone. to you into greater Thank scale with A side origination? given their complete and mind? from capital integration Good that about discussions product question color its your distribution in

Yes.

that leadership the the integration won. BSP that out the there's is So really -- Alcentra. extent And we've with driving integration, gone and the to now

do key you that you retain your is First make you sure thing employees.

And all their of we've We've so we clients. key team feel there. like with met stabilized the

BSP the move with the folks And the that's both so folks on clients. with central meeting key and

to good be That has Europe and that that faces sort about able making that that the European team little bit manager the we really market to distribute, local distribution a headwinds to in of very talked private is our is about. we a have of credit, step So first you faced. actually stabilization. BSP tell feel I private we can private credit but credit again, excited

in -- think So Alcentra is of And XX% April, progress. good our CLOs. CLO I we have there's

So we're good that. we about still -- feel

that's forward think they I I is at they'd fact think that the -- now we that where moving be though this is I think and point, hope where and are. we stable they're

This the session. hand like concludes Q&A I over you. back to now today's - Thank would call to

sorry. I'm

hear one everybody me? have answer. We without question on through other the Can came that screen

Yes.

Okay, great.

halfway market which $X.XX question only was, from question just to annual billion impact that I range levels, expenses, the So quarter referenced how million remaining a equal, billion improved as range guidance. annual we push despite And $X.XX only the We performance on guidance. guidance say, $X else improved of Bill slightly Katz. the formulary of compensation, guidance our had expenses. that guidance, all out we're year, improved but of flows, I'll the We're adjusted to question obviously, our an was on quarterly end increasing upper last billion. annual gave the adjusted a through follow-up And does

to And be performance right fees. be upper the for range, the expect billion excluding the guide of Thanks to would on the $X.XX that $X.XX year. end we So now, for billion question.

and call now CEO, over for turn to Jenny the President Franklin Ms. Thank to you. I would Johnson, comments. like final back

today's we we'd like everybody, forward again in to for our everybody. their hard you call. dedication, Thanks, look thank once And for thank and quarter. Great. Well, you work participating next and again, speaking employees to to

This much, thank so you Thank call. concludes you, today's And conference everyone. presenters.

now disconnect. may You